Green Tree Servicing LLC v. William Won Holdings, LLC et al

Filing 62

ORDER denying ECF No. 57 Motion to Dismiss. Signed by Judge Howard D. McKibben on 5/9/16. (Copies have been distributed pursuant to the NEF - JC)

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UNITED STATES DISTRICT COURT

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DISTRICT OF NEVADA

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GREEN TREE SERVICING LLC,

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Plaintiff,
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vs.
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WILLIAM WON HOLDINGS, LLC,
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WINGFIELD SPRINGS COMMUNITY
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ASSOCIATION, et al.,
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Defendants.
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_________________________________ )
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And related counterclaims.
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_________________________________ )

3:15-cv-00197-HDM-WGC
ORDER

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Before the court is defendant Wingfield Springs Community
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Association’s (“Wingfield”) motion to dismiss (#57).1

Plaintiff

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Green Tree Servicing LLC (“plaintiff”) has opposed (#58).
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Wingfield has not filed a reply, and the time for doing so has
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expired.
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The motion was purportedly also filed by “third-party defendant ATC
Assessment Collection Group, LLC.” ATC, however, was in this action only
because of the third-party complaint, and the third-party complaint was
dismissed without prejudice pursuant to the stipulation of the parties on
January 11, 2016. (See Doc. #46). As the parties recognized at a hearing
before Judge Cobb on May 2, 2106, ATC is therefore no longer a party to this
action.

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This action concerns real property located at 2400 Dodge

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Drive, Sparks, Nevada, 89436.

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Marceliana Samano purchased the property with a loan secured by a

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deed of trust on the property.

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National Mortgage Association (“Fannie Mae”) purchased the loan.

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In May 2008, Samano and Samano Reyes filed bankruptcy.

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they became delinquent on assessments and fees they owed to the

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HOA.

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February 2011, and the bankruptcy was terminated on August 3, 2011.

In 2006, Rafael Samano Reyes and

Later that year, the Federal

Thereafter,

Samano and Samano Reyes were discharged from bankruptcy in

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After filing and recording various foreclosure notices throughout

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2011 and 2012, including during the pendency of the bankruptcy,

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Wingfield foreclosed upon its lien on the property, and the

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property was sold at a foreclosure sale in 2012 to William Won

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Holdings (“WWH”).

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Plaintiff is the current servicer of the subject loan and

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beneficiary of the deed of trust.

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Wingfield and WWH, alleging four causes of action: (1) quiet title

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against WWH; (2) declaratory relief seeking a declaration that

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pursuant to 12 U.S.C. § 4617(j)(3), the foreclosure sale could not

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extinguish its deed of trust because Fannie Mae owned the loan at

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the time of foreclosure; (3) violation of the automatic bankruptcy

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stay; and (4) declaratory relief seeking a declaration that

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Nevada’s HOA foreclosure statute violates the Due Process Clause of

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the United States Constitution.

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matters” on the grounds that plaintiff was required, pursuant to

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Nevada Revised Statutes § 38.310, to submit its claims to mediation

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before filing suit.

Plaintiff has filed suit against

Wingfield moves to dismiss “all

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Section 38.310 provides, in relevant part, that any “civil

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action based upon a claim relating to . . . [t]he interpretation,

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application or enforcement of any covenants, conditions or

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restrictions applicable to residential property or any bylaws,

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rules or regulations adopted by an association” must be dismissed

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if the action has not first “been submitted to mediation or, if the

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parties agree, . . . referred to a program pursuant to the

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provisions of NRS 38.300 to 38.360, inclusive. . . .”

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action” is defined as “an action for money damages or equitable

“Civil

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relief.”

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in equity for injunctive relief in which there is an immediate

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threat of irreparable harm, or an action relating to the title to

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residential property.”

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Nev. Rev. Stat. § 38.300.

It “does not include an action

Id.

Plaintiff does not dispute that it did not submit any of its

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claims to mediation prior to initiating this action.

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however, recently file such a claim.

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plaintiff did not submit a mediation claim before filing suit, the

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court lacks subject matter jurisdiction over plaintiff’s claims.

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It did,

Wingfield argues that because

Plaintiff’s first claim for relief seeks to quiet title.

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Section 38.310 does not apply to quiet title claims.

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Family, LLP v. Adept Mgm’t Servs., 310 P.3d 555, 558-59 (Nev.

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2013).

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of action is DENIED.

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McKnight

Accordingly, the motion to dismiss plaintiff’s first cause

Plaintiff’s second claim seeks a declaratory judgment that the

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foreclosure sale could not have extinguished its deed of trust, or

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alternatively was invalid, because it was done in violation of a

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federal statute, 12 U.S.C. § 4167(j)(3).

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for declaratory relief relates to the title to residential property
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Plaintiff’s second claim

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and is therefore not a civil action subject to the mediation

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requirements of § 38.310.

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Natl’l Mortg. Ass’n, 2015 WL 5709484, at *3 (D. Nev. Sept. 29,

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2015).

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because it violated a federal statute is not subject to § 38.310,

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as such a claim does not relate to the interpretation, application,

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or enforcement of the CC&Rs.

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Invs. Pool 1, LLC, 2015 WL 5723647, at *4-5 (D. Nev. Sept. 28,

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2015) (concluding that Fannie Mae’s wrongful foreclosure claim was

See Saticoy Bay, LLC Series 1702 v. Fed.

Further, a claim that a foreclosure sale was invalid

See Fed. Nat’l Mortg. Ass’n v. SFR

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not subject to § 38.310 because it was based on an assertion that

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the foreclosure sale violated § 4617(j)(3)); see also Nationstar

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Mortg., LLC v. Falls at Hidden Canyon Homeowners Ass’n, 2015 WL

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7069298, at *3 n.2 (D. Nev. Nov. 12, 2015) (noting in dicta that

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bad faith claim under § 116.1113 would be required to be mediated

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only to the extent that the claim relied on an interpretation of

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the CC&Rs); Nationstar Mortg., LLC v. Hometown West II Homeowners

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Ass’n, 2015 WL 5092805, at * 2 n.3 (D. Nev. Aug. 26, 2015) (noting

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that the plaintiff’s claims based on “external state and federal

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limitations on the foreclosure do not require the interpretation,

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application, or enforcement of the CC&R”).

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claim for relief asserts that the foreclosure was invalid because

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it was done in violation of a federal statute.

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motion to dismiss plaintiff’s second claim for relief is DENIED.

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Plaintiff’s second

Accordingly, the

Plaintiff’s third claim for relief alleges that the

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foreclosure sale was done in violation of an automatic bankruptcy

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stay under 11 U.S.C. § 362.

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relief, asserts that the foreclosure was invalid based on an

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external federal limitation, and it is therefore not subject to §

This claim, like the second claim for

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38.310.

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for relief is DENIED.

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Accordingly, the motion to dismiss plaintiff’s third claim

Plaintiff’s fourth claim for relief asserts that Nevada’s HOA

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foreclosure statute violates the United States Constitution.

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Plaintiff seeks a declaration that because the statute is

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unconstitutional, the foreclosure sale was invalid and did not

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extinguish its deed of trust.

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claims for relief, this claim relates to the title of the property,

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and like the second and third claim for relief, it is based on an

Like plaintiff’s first and second

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external federal limitation to the foreclosure.

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plaintiff’s fourth claim for relief is not subject to § 38.310.

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The motion to dismiss plaintiff’s fourth claim for relief is

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therefore DENIED.

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For both reasons,

In accordance with the foregoing, Wingfield’s motion to
dismiss (#57) is DENIED.2

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IT IS SO ORDERED.

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DATED: This 9th day of May, 2016.

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____________________________
UNITED STATES DISTRICT JUDGE

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Plaintiff does not allege claims for bad faith, wrongful foreclosure,
or other claims that would be subject to dismissal pursuant to § 38.310.
See McKnight Family, L.L.P. v. Adept Mgmt., 310 P.3d 555, 558-59(Nev. 2013);
Nationstar Mortg., LLC v. The Springs at Spanish Trail Assoc., 2016 WL
1298106 (D. Nev. Mar. 31, 2016) (§ 38.310 applied to bad faith claim based
on an assertion that the HOA breached its duties under Nev. Rev. Stat. §
116.1113 and the CC&Rs and to wrongful foreclosure claim based on assertions
that the HOA gave inadequate notice or opportunity to cure, the sale price
was commercially unreasonable, the HOA breached the CC&Rs and the HOA acted
in bad faith); BAC Home Loans Servicing, LP v. Stonefield II Homeowners
Assoc., 2011 WL 2976814, at *2-3 (D. Nev. 2011) (claim that the HOA
improperly required payment of additional assessments in the form of
attorney’s fee and the costs of collection was required to be submitted to
mediation under § 38.310).

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